Macro Strategist at Bloomberg. Ex-diplomat, ex-tech exec, ex-banker. Author of The Everything Risk newsletter. Opinions my own. https://www.bloomberg.com/authors/AVSVN7p8ryM/edward-harrison
Edward Harrison
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War Consequence 1: US/Israeli strikes confirm Iranian need for military deterrent
War Consequence 2: Holding energy hostage via Hormuz as a deterrent confirms for many countries need to lessen dependence there
War Consequence 3: Iran accelerates development of nukes because of 1 + 2
Edward Harrison
What's striking about that is investors are telling us directly they see less inflation risk:
the breakeven inflation rate between inflation-protected Treasuries and normal ones have plunged and the premium investors want for holding those riskier long-dated assets has declined too.
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BTW, if you were Iran, you would DEFINITELY want to develop nukes now. The US/Israeli action tell the Iranians they need to find a military deterrent.
And given countries will look for ways to lessen dependence on Hormuz, that deterrent's sell-by date is clear.
www.bloomberg.com/news/article...
Read Trump's capitulation for yourself. He said he did it because he didn't want to be the next Herbert Hoover
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